Dean Baker's Blog, page 132

An Explanation for Weak Wage Growth That Fails the Simple Logic Test

When workers are doing badly you can always count on a large number of economists to come forward with ways to argue it really ain't so. For example, we have heard endless stories about how our price indices hugely overstate inflation — we're actually way better off than we think we are. Or, they point to the growth in non-wage benefits. One problem with that story is that non-wage benefits have been shrinking as a share of total compensation in recent years, not growing, but whatever.

One re...

Currency Rules In NAFTA Would not Just Be Symbolic

In an article on the effort to renegotiate the terms of NAFTA, the NYT noted the Trump administration's plan to put in language that would prohibit currency management. (The article uses the term "manipulation," which implies an action being done in secret. In fact, large-scale efforts to affect the value of a country's currency will almost always be open, since they are almost impossible to conceal.) The piece then notes that since both Canada and Mexico have freely floated their currencies...

Case of Sinclair Broadcasting: The Free Market and Having the Government Give Money to Rich People Are Not the Same Thing

The NYT had a piece discussing Sinclair Broadcasting's plans for expansion and the apparent green light coming from the Federal Communications Commission (FCC). As the piece explains, the FCC is now headed by Ajit V. Pai. Mr. Pai apparently met with David D. Smith, the chairman of Sinclair, just before he became chair. Shortly thereafter, the FCC weakened a rule that may have slowed Sinclair's plans for expansion.

At one point the piece describes Mr. Pai as "an enthusiastic purveyor of free-m...

Lies for Microsoft and Pfizer on the NYT's Opinion Page

When you're rich and powerful in the United States you get to lie freely to advance your position in public debate, including the opinion page of The New York Times. This is why the paper ran an anti-free trade diatribe against China, insisting that the country respect patent and copyright protections claimed by U.S. companies.

The column, by two former U.S. intelligence officials, asserted:

"Chinese companies, with the encouragement of official Chinese policy and often the active participat...

Senator Lankford Is Confused About the Trade Deficit

Yep, the senator from Oklahoma says it is good in a Washington Post column. Most of Senator Lankford's confusions are pretty standard, but he does come up with an original one.

"For starters, a powerful economy such as ours often runs a trade deficit because of the immense buying power of its people. Mexico’s average net per capita income is roughly $13,000, while the average U.S. household brings in more than $41,000 each year. Americans have a far greater capacity to buy goods than do cons...

Why Is It So Hard for Intellectuals to Envision Alternative Forms of Globalization?

When it comes to critics of globalization with standing in the mainstream of the economics profession, few are better than Dani Rodrik. Nonetheless when it comes to laying out the indictment of the path pursued over the last three decades in a Washington Post interview, even he largely accepts the story that the basic story is that “globalization” has some specific direction attached to it.

The point here is that globalization, meaning the greater integration of economies across the world, co...

The Cost of Trump's Security and the Generous Donation of His Presidential Salary

President Trump has made a point of very publicly donating his $400,000 annual salary as president to various civic minded efforts. He recently announced the donation of $100,000 to a camp run by the Department of Education to encourage women to enter science, technology, education, and math. He donated his first quarter's pay of $100,000 the the National Park Service to help pay for the cost of the restoration of the Civil War battlefield at Antietam.

While these contributions will likely su...

Breitbart Strikes Out in Trying to Give Donald Trump Credit for Stock Market Run Up

I had a blog post a couple of days back in which I argued that rising stock prices reflected expectations of higher future corporate earnings, at least insofar as they were not just driven by irrational exuberance. Since no one seems to be expecting higher growth, the expectation of higher corporate profits presumably means that investors are expecting a redistribution of income away from workers and consumers to corporate profits. This is actually a plausible scenario given Donald Trump's pr...

The High Cost of Protectionism: The Case of Opioids

The Washington Post had a column by Ohio attorney general Mike DeWine explaining why he was suing five opioid manufacturers. Dewine explains:

"We believe evidence will show that they flooded the market with prescription opioids, such as OxyContin and Percocet, and grossly misleading information about the risks and benefits of these drugs. And as a result, we believe countless Ohioans and other Americans have become hooked on opioid pain medications, all too often leading to the use of cheape...

Opposition to Trade Deals: Brad DeLong's "Socialism of Fools" Might Look Like Common Sense to Those Outside the Fraternity

The usually sensible Brad DeLong is very unhappy with those who oppose the agenda that has passed for globalization over the last three decades. He argues that people are foolish for believing that globalization has had a major impact on employment and the distribution of income in recent years. I'll take the side of Brad's "fools" in this matter.

First, Brad is well aware that the economy has operated well below full employment at least since the collapse of the housing bubble, I would argue...